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Introduction

It is unarguable that historically, Nigeria has not really
leveraged its bountiful and well-endowed real estate (RE, 923,768
km² land mass) as a veritable factor of production to drive
economic growth and prosperity. Why are Nigerians yet to optimally
tap into our greatest asset? As an illustration, Nigeria's
massive housing deficit is unjustifiable, given the resources
available. A lot of institutional challenges would take the blame;
they have been, and will continue to attract discussions, but such
are not the main focus of this article. Rather, we examine how RE
stakeholders can utilise RE JV transaction models to undertake
(large scale) RE investments cum developments, thereby helping to
reverse Nigeria's suboptimal RE situation. RE JVs (incorporated
or otherwise) are a vehicle/ platform for co-investment by two or
more parties: comprising a landowner and developer(s)/equity
investors; debt providers are not JV parties for this purpose.

Rationale for RE JVs

The start off point is to ask "the rationale
question": why consider RE JV option at all? RE JVs enable the
development otherwise unfeasible or improbable RE projects by
harnessing the complementarity (synergy effects) of the JV
partnership. A landowner has an asset but lacks the resources to
fully develop it. Developing it alone could make the project
subject to delays - a common reason for many abandoned projects
dotting the landscape, and further creating capital allocation
inefficiencies. Or, the property may end up not being developed on
a scale that would have been optimal for it.

Also, "solo development" could result in sub-quality
output. Frustrated with inability to develop the property, the
landowner may sell it off - and thereby realise significantly less
value than would have been otherwise possible. Meanwhile, as long
as the property remains undeveloped, value is being left unrealised
or 'locked in'. Illustrative of the biblical axiom, that
"two are better than one, because they have a good return
for their labour" (Ecclesiastes 4:9), JV offers a
landowner risk dilution opportunity by not having to assume the
entire project risk. This de-escalation of concentration risk could
have a very significant impact on the long term financial standing
of the landowner, potentially obviating drastic results, like
bankruptcy or forced sale of the asset to pay debts.

From the developer or (non-asset owning partner's
perspective), JV offers an opportunity to access land in his
preferred location that he probably might have been unable to
access; for example, because no one is willing to sell. Or the
plots available for sale may be suboptimal for the project/use that
the developer is considering. It is also possible that the
developer/partner's resources are limited and would not have
been able to fund both the land acquisition and subsequent
development. Thus, 'receiving' the land as contribution
from his partner, frees him to focus on development costs only.
Replicating such landowner/partner contributions results in
accelerated expansion of developers' footprint, thereby
enhancing diversity of his developed and revenue earning assets. A
good example is hotel, and retail chains – JVs will ensure
faster rollout as multiple projects (in different locations) can
proceed simultaneously.

Examples of the foregoing abound. A ready one is the Imperial
International Business City (IIBC) project being promoted by the
Elegushi Royal family (landowners) and Channel Drill Resources
Limited (Developers) for a 'smart city' covering 200
hectares on sand filled land at Elegushi, Lagos. IIBC is very
unlikely to be actualized without collaboration between the JV
partners. Several other examples include NICON Town (JV
between NICON Lekki Limited and Harris Dredging Limited), the
Palms Shopping Mall (Persiannas and Actis) and nearby
Millenium Homes in Oniru Private Estate, Jabi Lake
Mall (Actis and Duval Properties Limited), the Heritage
Place (Actis and Primrose Development Company), etc.

In summary, JV rationale mimics the strategic wisdom of
alliances in historic and modern warfare, because "there
is strength in numbers". Ecclesiastes 4:10b -13
advises: "But pity anyone who falls and has no one to help
them up. Also, if two lie down together, they will keep warm. But
how can one keep warm alone? Though one may be overpowered, two can
defend themselves. A cord of three strands is not quickly
broken." The complementarity/ synergy benefits of JVs
will continue to recommend it as a pragmatic option to get many
otherwise unfeasible projects off the ground.

Consummating RE JVs: Key Considerations

Obviously one party would have been mulling, if not to have
already decided, that the JV model would be most ideal in respect
of a particular project. Since "it takes two to
tango", such party will begin to prospect for potential
partner(s) and depending on the party's experience in RE
transactions, certain key considerations will come to play: from
due diligence (pre-transaction stage) to execution of the JV
contract. Essentially, thorough background work by the partner
before proceeding to contract execution reduces the prospects of a
failed transaction. It is critical that parties are aligned in
order to deliver value on the project. We highlight these issues
(which may not necessarily be as sequenced here, in all
transactions), below:

(a)Identifying and
'Due Diligencing' the JV Partner:
The relevant party will source prospective partner(s) through
appropriate channels, starting with leveraging its business
networks. Depending on capacity, they may engage professionals
(estate agents/RE advisory firms) to source for potential JV
partners or they could undertake the assignment directly, either
mode could include advertisements. If the project is significant
enough, roadshows and beauty parades may be conducted; and outcomes
may include exchange of information material and shortlist or
'culling' the field so more detailed attention can be paid
to only the more serious candidates.

Key questions are: will the potential partner be the right
fit – bringing complementary resources, skills, etc
that the other party lacks and which together would create
synergyfor the project? Are values aligned – in
terms of 'culture'/work approach, ethics, integrity, and
also track record of delivering value they promised? Nothing
could be worse than a union of two strange bedfellows. Such could
not only spell disaster for the project, but untangling could be
problematic - expensive, contentious, distracting, time consuming
and attract reputational risk/damage.

If initial signals are positive towards a potential deal, the
party seeking prospective JV partner may need to engage
professionals to conduct legal/regulatory and commercial DD of the
proposed counterparty, and vice versa. A key part of the
DD is on the asset itself to obtain comfort it meets project
requirements. Is title valid and clean? If encumbered, is there
scope for its deployment as JV asset or subject of JV
investment? If it is a partly developed property at the time a
prospective JV partner is to invest, he would be interested
technical/structural checks of the property to make sure it passes
muster for the intending JV partner to get comfortable about
committing resources to its further development.

(b) Alignment of Vision and
Goals: Prior to, or contemporaneous to the
DD, would be the asking and answering of some questions that
ensures that the goals and vision of the parties are aligned. The
term sheet (in addition to preliminary/marketing or roadshow
material), may be a useful tool in in this regard. Mismatch of
goals/expectations always spell problems down the line.

Some of the key questions that would arise are: what type of
development is being contemplated - commercial (office, retail,
hotel), residential (apartment block, detached/semi-detached units
(bungalows, duplexes), terraces, etc) or mixed use? What is the
target market, and the marketing strategy to underlie the project?
Will the asset be sold outright for JV partners to cash out upon
sale or leased for long term annualized rental income? If the
latter, what sort of management obligations will the JV partners
have in respect of the property or will they outsource facilities
management service?

What is the financing model – off plan sales,
achieving critical mass of commitments by off takers of units or
anchor tenants before commencing development, as a form of risk
management? Is the project commercially viable, considering current
and projected economic realities? Do the JV partners have enough
resources to execute the project, what mode of external funding
should be pursued if necessary? What kind of terms are the JV
partners comfortable with – what will they be willing to give
up/cede in order to secure funding? What should be the mix of debt
to equity? Will JV partners also be providing shareholder loans,
and at what rates – competitive, above or below
market?

Are responsibilities evenly spread out and would any party
be earning fees for providing services to the project? Can the
related consideration be regarded as part of a partner's
equity? Will partners take some units on completion as part of
their payout from the project, whilst the core remains as
partnership investment asset?

The Orange Island development (located off the Lekki Bridge)
provides a good illustration of some of these points between Lagos
State Government (LASG) and FW Dredging. Whilst LASG provided the
150 hectare site, same was sand filled entirely at JV partner's
cost and the reclaimed land was divided 50:50 between the parties,
with each entitled to freely sell or deal with their allocated
portions. Sometimes, the JV may be "loose", an example
being the famous Eko Atlantic City – probably Africa's
largest reclamation project, and envisioned to be Nigeria's
financial hub. On the project, LASG provided "public cum
regulatory" support, the developer (Southern Energyx Nigeria
Limited) fully funded the reclamation, and entitled to sell the
plots, whilst LASG earns consent fees on sales,
planning/development approval fees, land use charge, etc. These
fees would never have materialised if Eko Atlantic had not been
envisioned and the land reclamation consummated.

These success stories does not detract from the fact that whilst
pooling together of resources via JV arrangements has obvious
benefits, poor planning in the initial stages can lead to an ugly
termination or failure of the project itself. A July 2010 Deloitte
publication, 'A Study of Joint Ventures: The Challenging
World of Alliances'1 reported that clarity of
the JV strategy, governance and management are top three priorities
of interviewees for the study. Obviously, alignment and unity of
purpose in these areas is critical to success of the relationship
and of the venture.

(c) Non-Disclosure (and Non-Circumvention)
Agreement/Term Sheet/Letter of Intent: At
some point (sequence and timing being a function of relevant
transactional circumstances), there would be a Term Sheet (or a
Letter of Intent (LOI)/ Memorandum of Understanding (MoU).
Typically, this would have been preceded by or incorporate a
Non-Disclosure Agreement (NDA) or NDA coupled with
Non-Circumvention Agreement (NDNCA), which provides a basis for
parties to be comfortable with disclosures of sensitive business
information and strategy, in pursuance of trying to reach a
deal.

Except for specific clauses (e.g. on confidentiality,
exclusivity, dispute resolution) that provides to that effect, Term
Sheets, LOIs and MoUs are not binding on parties. They do not
compel the parties to transact, but provide an outline of terms
that may go into the definitive agreements. The LOI highlights the
purpose of the JV (vision/goal alignment) and some other key
elements such as equity/capital contribution as the partners may
decide. It is used as a basis for negotiation of terms between the
parties for the purpose of the successful execution of the JV.

The economic terms set forth in the LOI are a frequent
battleground where one party considers them absolute and the other
an approximation, especially where disagreements ensue in the
course of the JV. In BPS Construction & Engineering
Co. Ltd. v. FCDA2 the Supreme Court per
Kekere-Ekun, JSC, held that:

"...It is clear that a memorandum of understanding or
letter of intent, merely sets down in writing what the parties
intend will eventually form the basis of a formal contract between
them. It speaks to the future happening of a more formal
relationship between the parties and the steps each party needs to
take to bring that intention to reality... Notwithstanding the
signing of a memorandum of understanding, the parties thereto are
not precluded from entering into negotiations with a third party on
the same subject matter..."

As noted earlier, in most cases, the LOI precedes definitive
agreements. The Orange Island project which involves reclamation a
150 hectare island by dredging of sand from the bed of the Lagos
Lagoon, reclamation of, construction of an access land bridge and
infrastructure to service the island provides a good example. The
parties signed their MoU in January 2013 and a JVA (between LASG
and the Developers' SPV, Orange Island Development Company) on
9th January 2014.

(d) Escrow Considerations:

This approach becomes necessary where the landowner would not be
expected to 'put up' his entire land as part of his JV
contribution. This could occur for a number of reasons such as
where the land is a large expanse and the JV project would only
occupy a portion of it, whereas there is only one title document
for the entire land. In order to restrict the ability of the
landowner to use or pledge such land as security in a manner
inconsistent with the JV partner's rights, parties can agree
that the title documents would be put in escrow pending
partitioning of the land and perfection of title to the JV portion.
It is wise for such perfection steps to commence or be concluded
before the JV partner begins to commit resources to the JV project.
Escrow arrangements whereby title documents are held by third
parties (escrow agents which could be banks or trust companies) for
release on specified conditions (usually completion of title
perfection process to JV portion), also operate as a form of
payment security for the JV partner/developer/financial
contributor. It is also possible for the JV entity to enter into
escrow arrangement for its own title document, after it has
perfected its title. Usually escrow costs will be charged to
project costs.

(e) Structuring Considerations:

i. Use a Special Purpose Vehicle (SPV)?

Should the parties have an incorporated JV entity as special
purpose vehicle in which they would take shares, especially as
foreign investors cannot directly be partners in an unincorporated
Nigerian partnership? This is largely driven by section
54 Companies and Allied Matters Act, Cap. C20 LFN
2004 prohibition against foreign companies doing
business in Nigeria without undergoing local incorporation, and
Partnership in an RE JV would clearly amount to doing business.
Secondly, the incorporated JV would be a Nigerian company,
therefore issues around foreigners not being able to hold interest
in land will not arise.3

Transaction dynamics will determine how the SPV model is
executed. If the property is already being held by the
landowner in an SPV, the JV partner merely acquires equity in the
SPV. Sometimes the SPV would be a new entity with the partners as
subscribers, and the property would be transferred to it. The
Shareholders Agreement (SHA) governing rights, obligations and
relationships in respect of the SPV between the
shareholder/partners approximates to the JV Agreement
(JVA)/Development Agreement (DA). Albeit in some cases, parties may
prefer to have both SHA and JVA/DA and both does not have to be
necessarily duplicative. Of course where there is no SPV, there
would only be JVA/DA. Many of the structuring considerations
discussed here would be covered in the SHA/JVA.

Should the parties also consider having a foreign ParentCo
for the SPV? This would make for easier and more efficient
transactions – the property can be indirectly sold by selling
ParentCo offshore. This will significantly save on transaction
costs and time (no need for Governor's consent pursuant
tosection 22 Land Use Act, Cap. L5 LFN
2004, or any Nigerian regulatory notifications,
even to the Corporate Affairs Commission (CAC), since nothing
changes at SPV level).Where should be the
residence/location for ParentCo? A low tax jurisdiction (where
ParentCo as investment company enjoys preferential tax treatment,
for example qualifying for corporate income tax exemption on its
inbound dividends/nil capital gains tax (CGT) exposure of share
transfers by its shareholders), and preferably a country with
double tax treaty (DTT) with Nigeria (and thereby enjoy lower
withholding tax (WHT) on dividends from SPV), would be ideal.
Another benefit of having ParentCo is that the Nigerian SPV (Parent
Co's subsidiary) will not be subject to minimum tax provisions
(section 33(3) Companies Income Tax Act (CITA) Cap C21
LFN 2004).4

However, the Nigerian transaction cost savings would have to be
balanced against the start-up and maintenance costs/compliance
obligations of ParentCo. Another advantage to having ParentCo may
be its better positioning to raise international finance at
relatively cheaper rates than would have been otherwise possible in
Nigeria. Its acquisition may also represent easier entry strategy
for RE investors wishing to invest in Nigeria. The Nigerian
investor/shareholder in ParentCo is able to enjoy the liberty
deriving from no prohibition against such offshore investments by
Nigerians, and also the ability to enjoy Nigerian tax exemptions on
offshore dividends brought into Nigeria via approved channels
(Nigerian banks), sections 11and
23(k)PITA, CITA respectively.

SPV is also able to enjoy the 'pioneer status' tax
treatment of property development companies in pursuant to
provisions of the Industrial Development (Income Tax
Relief) Act5 in addition to the
transaction optimality referred to above, even if has no offshore
ParentCo; transfer of its shares still represent indirect
acquisition of its property that validly escapes Governor's
consent. It is however instructive to note that recently the
Federal Inland Revenue Service (FIRS) signalled its intention for
more aggressive tax enforcement against property companies. For
example, by treating property assets of companies that did not file
tax returns as their turnover for the purpose of taxing same
(though it is hard to justify treating turnover as taxable
profits). Presumably the FIRS assessments was meant to be a
'shock treatment' to ginger asset rich but non-tax
complaint companies into action.

ii. SHA/JVA Issues

Equity Stake and Capital
Contributions: The SHA or JVA/DA will prescribe
respective contributions by the parties and the equivalent stakes
in the SPV or the project. The landowner may contribute only land
and/or cash or services (such as facilitating receipt of regulatory
approvals) in addition, whilst the other partner(s) may also take
equity stake for cash consideration and/or services such as
consultancy services or project management. In line with
section 137 CAMA, consideration for
shares other than cash must be valued.6

Mode of assigning the property to the JV (where landowner is
contributing land and same is not yet in the JV), would be
stipulated; treatment of perfection costs (if applicable) would
also be provided for. Landowner will expectedly give indemnity in
favour of SPV (and JV partner) for defects in title. The scope
(amount, cap and tenor) of such indemnity is critical. Timelines
for payment for the equity stake would be prescribed to ensure that
the project does not suffer delays due to equity funding
shortfalls, there may be provisions for initial and additional
investments/payments, remedies for breach (such as interest on
delayed payments, dilution of partner's stake as a result of
inability to meet up with contracted commitments), etc.

Capital Calls (CCs) could also be used to bring cash into the
JV. Initial CCs are usually made simultaneously or close to the
execution of the SHA or JVA/DA or in accordance with agreed
timelines. However, situations arise where additional CCs would be
made, such as the acquisition of an asset or operating expense
shortfall. Additional CCs may be made for either anticipated or
unanticipated events such as the occurrence of an uninsured
casualty, increased cost of goods or labour etc.

It is not sacrosanct that the value the developer/partner is
bringing to the JV table – sourcing/arranging finance (apart
from its own equity contribution), technical/ consultancy services,
project management, marketing support and facilitating regulatory
approvals - has to be paid for with equity, these could be paid for
in cash.

Capital Structure: The JVA/SHA could, pursuant to
professional advice received, prescribe (optimal) capital
structures. It is common to have a mix of equity and debt, and the
equity to debt ratio may be a function of availability of resources
of the partners, their risk appetite, relative cost and terms of
debt capital, tax benefits, etc. Whilst loan expense is tax
deductible, and an "above the line" item, equity risk is
greater, albeit the upside too could be substantial for successful
projects. Some partners could also commit to providing shareholder
loans as a means of capturing value at both ends.7 Third
party debt may also be necessary, and presumably the parties will
ensure that SPV gets the most competitive terms possible in its
circumstances.

Insolvency Safeguards: To guard
against the prospect of the JV project becoming an abandoned
project, DD conducted prior to entry into the JVA/SHA should have
provided clarity on financial position of partners. In addition,
the SHA should have an 'insolvency clause' such that where
a party becomes insolvent, that fact (as an event of default),
triggers deemed transfer of the insolvent party's interest at a
predetermined valuation process. This could be based on market
price, a formula or determined by an independent
expert.8 Without such provision, insolvency could
severely affect the entire project, liquidators might not be
interested in the continuation of the project and could seek to
dispose the insolvent party's interest, often to third parties
that may not be the right fit for or complement the other JV
partner.

Governance: The SHA/JVA will have
provisions for managing the affairs the JV/SPV. Board
representation will be dependent on a question of stake, and there
may be provision for independent directors – RE experts who
will add value with their perspectives. There may also be a Project
Management Committee (PMC) comprising representatives of the JV
partners who would be reporting to the Board or Project Steering
Committee (PSC). Where parties are represented in equal numbers and
there is a tie, there could be provision for deference to views of
the JV party having technical, consulting or development
responsibility for the project. These arrangements ensure that
every partner is involved in the decision making process of the JV.
The governance framework will cover issues such as board
composition and changes thereto, dividend policy, decision
thresholds on key issues (veto/supermajority matters), transfer of
interests and pre-emption rights, tag/drag along provisions on
exits, etc.

Related Party Contracts/Transfer Pricing (TP)
Issues: It is not uncommon for JV partners
to have contractual relationships with the JV/SPV itself. As noted,
a partner could contribute land, another could provide services:
would the shares in consideration therefor be issued at a
premium, discount or nominal value? Same applies where a
partner is an anchor tenant; there would be need to balance the
competing interests of the tenant/partner getting a very good deal
as part of its "reward" for promoting the project vis
a vis, SPV's ability to maximise its rental income
potential from market competitiveness standpoint.

Some of these could be thrown into focus where downturn catches
up with long term tenancies whose rent was agreed in boom period,
and possibly in foreign currency but which current realities now
make untenable. Or tenant may want to scale down because the
contracted space is now excess to requirements. Whilst the lease
agreement should have renegotiation clauses, the JVA/SHA may also
provide guidance. Generally, related party contracts (for example,
terms of shareholder loans) should be competitive in order to
obviate substantial TP compliance issues.

Profit Distribution: Sharing
of profits will generally mimic equity stake/contribution of
parties. Parties may earn bonuses, for example the developer, for
timely completion. This would be a pre-profit share event (expense
to the JV). The transactional realities of the JV could also inform
how profit is shared. For example, the Orange Island project was a
50:50 split of the entire reclaimed land, meaning that there is no
accounting for profits at the JV level. This means the marketing
savvy/strategy of each partner could determine how much it
eventually makes from the project. For example, a party may decide
to "bank" the land, waiting for prices to increase
(however this is vis a vis time value of money), whilst
another may decide on immediate sale of its plots, to realise near
term value.

Sometimes, the division could be that value is ascribed to the
land contribution, and the developer gets the differential between
land value and the reclamation costs from sale of plots (or
vice versa, where pre-JV land value exceeds reclamation
costs), before the balance of plots is shared in agreed ratio.
Another variation is for all proceeds to go into a JV Proceeds
Account (especially where bank financing was involved), from where
the net (cash) proceeds will be shared after all costs have been
settled. This means JV has marketing responsibility to ensure
successful sale of the entire development.

Dispute Resolution: Any contract worth
its salt must have dispute resolution provisions. It is a given
that governing law will be Nigerian law, because the subject matter
relates to land in Nigeria. However if the SHA relates to ParentCo,
then the governing law can be foreign, the most popular being
English law9 or Mauritius (if ParentCo is resident in
Mauritius).

Typically, there would be a two or three tiered step – (a)
discussions between designated representatives of the partners to
amicably resolve the dispute; (b) mediation and conciliation; and
(c) arbitration if dispute is not resolved within stipulated
timeline. The parties may also prefer regular courts to
arbitration, albeit for JVAs involving foreign investors,
arbitration tends to be more popular especially as the wheels of
justice grind slowly in Nigeria.

The JVA will also provide for resort to court for urgent
injunctive relief where necessary. Given that enforcement/challenge
of arbitral awards would still make resort to court inevitable, it
is important to have appropriate drafting that restricts ability to
take frivolous steps in these regard. One of them is by providing
that the award shall be final,10 and also ensure that
the arbitral process provisions have clarity. Essentially, in
preparing the JVA, the legal practitioner should not treat dispute
resolution as a simple one-size-fits-all arbitration provision.
Pertinent questions include: should the JVA prescribe sole
arbitrator or three man panel? What qualifications should
arbitrators have? It may be good to prescribe sectoral/technical
expertise/experience requirements. As with all the agreements, the
usual considerations apply: the scope of the arbitration clause,
spreading of costs and attorneys' fees, appointment of
arbitrator, these must be specifically talked through and agreed in
light of JV realities.

It is worth reiterating that serious consideration should be
given to setting up a more informal process for resolving disputes
whilst the JV is pursuing its objectives rather than a more formal
procedure that could stall same, for example vide
injunctions. In the event of a dispute, parties may be required to
refer to a rapid mediator session involving seasoned JV experts
appointed by the MC. Subsequently, the dispute can be referred to
arbitration. The objective during the first stage is simply speed,
and the reaching of some interim resolution that will not hold up
progress on the project.

In 2016, a real estate firm, Afriland Properties Plc reportedly
filed a N13 billion suit against LASG over LASG's termination
of their JVA for re-development of Falomo Shopping Complex, Ikoyi.
Afriland's claim, among other issues, was that LASG allegedly
terminated the JV without strict adherence to the terms of the JVA.
The matter was subsequently referred to the Lagos State Multi-Door
Court House for possibility of settlement between
parties.11

Conclusion

RE JVs will continue to be an attractive business model to
undertake new projects whilst managing risk vide pooling
resources, thereby overcoming capital and other capacity
constraints, increasing asset portfolio/ market share, and in
entering new markets, amongst other benefits. It could be an asset
optimisation strategy for landowning families, obviating the
proverbial "seller's remorse", which could be more
accentuated by the subsequently significant successes of developer
projects that they sold the land for (realising only one time
income). The quest to "make up" through various schemes
and devises could lead to litigation, which would distract the
developer, attract negative publicity and imperil marketing of the
project. JVAs obviates these, albeit could have its own set of
problems if not well managed.

The landscape is replete with successful and failed JV projects
and transactions. It is imperative that investors and prospective
JV parties are mindful of "critical success factors", and
ensure that the JV plays to its strengths to deliver profitable
outcomes for all stakeholders. The importance of professional
advice in facilitating such, enhancing the prospects of success
cannot be overemphasized. As Nigeria races to bridge her housing
and infrastructure gaps, we hope that the instrumentality of RE JVs
will be more frequently and optimally employed.

3. See for example, section 1 Acquisition of
Lands by Aliens Law Cap. A2, Laws of Lagos State,
2003 provides: "no alien shall acquire any
interest or right in or over land from a native of Nigeria unless
the transaction under which the interest or right is acquired has
been previously approved in writing by the Governor." See
also, section 3(1)-(2) Native Lands Acquisition Law,
Cap. 80, Laws of Western Nigeria; Section 4(1)-(2) Acquisition of
Land by Aliens Law, Cap. 2, Laws of Eastern
Nigeria.

4. Although the taxman could play 'gotcha' with
excess dividend tax provisions (section 19
CITA, which incidentally has a supremacy
clause).

5. Cap I7 LFN 2004

6. Section 137(1) and (4) CAMA
provides as follows t: "(1) Where a company agrees to accept
payment for its shares otherwise than wholly in cash, it shall
appoint an independent valuer who shall determine the true value of
the consideration." ...(4) A company shall not accept as
payment or part‐payment for its shares consideration other
than cash unless the cash value of the consideration as determined
by the valuer is worth at least as much as may be credited as paid
up in respect of the shares allowed to the proposed
purchaser.

7. If there is a ParentCo and foreign loan is arranged,
same may enjoy 100% or graduated WHT exemption, depending on tenor
(Third Schedule CITA)

8. There may also be provisions for a discount though
care must be taken that same is not viewed as a penalty and the
discount therefore becoming liable to be nullified by the
Court.

9. Most foreign investors are comfortable with English
laws and also for "neutrality" reasons.

10. In Bill Construction Co. Limited v. Imani
& Sons Limited/Shell Trustees Limited (A Joint Venture) (2006)
LPELR-SC.63/2002, the Supreme Court restored the
decision of the State High Court in enforcing an arbitral award in
respect of a contract for the building of the United States of
America Embassy Staff Housing and recreational facilities at Abuja
with a provision that any dispute between the parties must be
referred to arbitration and the award of such arbitration shall be
final and binding on the parties.

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Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.

To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

Please set your data preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access

No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq: